Nirmala Sitharaman Unveils Third Tranche Of Covid-19 Relief Package Focused On Agriculture

Finance Minister Nirmala Sitharaman today announced the third tranche of measures under India’s Covid-19 relief package—a Rs 20-lakh-crore plan aimed at bringing the economy back to its feet after the lockdown.

Eleven measures were announced today for agriculture and allied sectors. On Wednesday, in the first tranche of the economic package, the finance minister announced measures for small businesses, non-banking financial firms and power distribution companies. On Thursday, the finance minister’s focus was on migrant workers, farmers and the urban poor.

Here are key highlights from today’s announcements:

• New Rs 1 lakh crore agriculture infrastructure fund to be established.
• A new scheme worth Rs 10,000 crore aimed at formalisation of micro food enterprises.
• Allocated Rs 20,000 crore for fishermen through the Pradhan Mantri Matsya Sampada Yojana which was announced in the Union Budget 2020.
• Another fund of Rs 15,000 crore for developing animal husbandry infrastructure has will be set up.
• Government will allocate Rs 4,000 crore for herbal cultivation.
• For beekeeping initiatives, Rs 500 crore has been set aside.
• Operation Greens will be expanded to cover all fruits and vegetables for Rs 500 crore.
• Amendments will be brought to the Essential Commodities Act to deregulate foods like cereals, edible oils, oilseeds, pulses, onions and potatoes.
• Agriculture marketing reforms will be implemented through a new law that will remove barriers to inter-state trade.
• Farmers will be given price and quality assurance through facilitative agriculture produce.

Read on for more details on each announcement.

“We’ve been taking inputs and based on that we’ve been working. PM Garib Kalyan was a package announced hours after the lockdown. It had monies going. Rs 500 for women with Jan Dhan accounts for three months. There was money given. It may not be adequate. I grant that. Nothing can be adequate at this time when people are cutoff, when people are staying put in their house, when people don’t have the money they earned given to them, their salaries are not coming. Nothing can be adequate. But the first thing we announced was give money to people. Give gas to them to cook in their houses so that they don’t go running for fuel to cook food. Give them free grains. We did do that.”

—Finance Minister Nirmala Sitharaman

The government will bring in a facilitative legal framework to ensure that farmers get a predictable price and predictable sales of their produce.

Farmers will be able to engage with processors, aggregators, large retailers and exports so that they can fix their fair price, be sure that they can export and in the process benefit from better technical assistance.

The government has announced that a new law will be formulated to provide adequate choices to farmers to sell their produce at attractive prices, the finance minister said.

The law will remove barriers on inter-state trade and establish a framework for e-trading of agriculture produce.

Earlier, Sitharman said, that farmers were bound to sell produce only to licensees in APMCs. Such restriction results in hindrannce in free flow of the agriculture supply chain.

The new central law will remove all these hindrances, she said.

The government will make changes to the Essential Commodities Act to enable better price realisation for farmers, the finance minister said.

Agriculture foods like cereals, edible oils, oilseeds, pulses, onions and potatoes will now be deregulated.

There will be stock limit imposed under very exceptional circumstances like a famine with surge in prices.

Stock limits won't apply to processors or value chain participants.

The government will extend Operation Greens—which covers tomatoes, onions and potatoes—to all fruits and vegetables.

The scheme includes 50 percent subsidy on transportation from surplus to deficient markets. It also has a 50 percent subsidy on storage, including cold storages.

The pilot was done for 6 months and will now be expanded and extended. The plan is expected to deliver better prices, reduced wastages and affordable produce.

The government will set aside Rs 500 crore for beekeeping initiatives in the country to develop infrastructure.

The plan is related to building integrated beekeeping development centres, collection, marketing and storage centres, post-harvest and value addition facilities for beekeepers.

The government will allocate Rs 4,000 crore to for further herbal cultivation in the next two years.

Over 10 lakh hectare of land will be covered under herbal cultivation. This will lead to Rs 5,000 crore income generation for farmers, Sitharaman said.

It will also aid a network of regional mandis for medicinal plants.

The National Medicinal Plants Board will bring 800 hectare area by developing a corridor of medicinal plants along the banks of river Ganga.

The government will set up a new animal husbandry infrastructure development fund of Rs 15,000 crore.

The aim is to support private investment in dairy processing, value addition and cattle feed infrastructure. Incentives will also be given for establishing plants for export of niche products.

The Finance Minister announced an Rs 20,000 crore for fishermen through the Pradhan Mantri Matsya Sampada Yojana which was announced in the Union Budget 2020.

The scheme will be aimed at fixing critical gaps in the fisheries value chain.

Of the total amount, Rs 11,000 crore will go for activities in marine, inland fisheries and aquaculture. The remaining Rs 9,000 crore will be for infrastructure like fishin harbours, cold chains and markets.

The key activities covered under the scheme will be cage culture, seaweed farming, ornamental fisheries along with procuring new fishing vessels, improving traceability and building a laboratory network.

This will lead to additional fish production of 70 lakh tonne over five years, Sitharaman said. It will also provide employment to over 55 lakh people, she said, adding that exports in the sector will double to Rs 1 lakh crore.

The focus will be on islands, Himalayan states, north east India and aspirational districts.

The government has announced a scheme worth Rs 10,000 crore aimed at the formalisation of micro food enterprises.

The scheme will be launched to help almost 2 lakh micro food enterprises undertake technical upgradation, meet good food standards, build brands and market their produce.

Existing enterprises and farmer producer organisations will also be supported under the scheme.

The scheme will have a cluster-based approach. For instance, mangoes in Uttar Pradesh, bamboo shoots in North eastern states and chilli in Andhra Pradesh.

Finance Minister Nirmala Sitharaman has announced setting up a Rs 1 lakh crore fund for enhancing agricultural infrastructure in the country.

The facility will provide financing for funding agri-infrastructure projects at farm-gate and aggregation points, which include primary Agri cooperative societies, farmer producer organisations, agriculture entrepreneurs and startups, among others. Farm gates include facilities like cold chains and storage.

The fund will be created immediately and provide impetus for developing an affordable and financially viable post-harvest management infrastructure, Sitharaman said.

• During the lockdown period, purchases of over Rs 74,300 crore based on the minimum support prices have taken place.
• PM KISAN fund transfer of Rs 18,700 crore.
• Claim payment of Rs 6,400 crore cleared under PM Fasal Bima Yojana.
• Over 560 lakh litre of milk per day procured by cooperatives as the demand of milk had fallen.
• Over 111 crore litres were procured extra ensuring payments of Rs 4,100 crore.

The finance minister said that eleven measures for the agriculture sector are being announced. Of these, eight will revolve around the strengthening of infrastructure, capacity and building logistics for the agri sector.

The third tranche of economic measures will focus on agriculture and allied activities, said Finance Minister Nirmala Sitharaman. “Today’s measures are on agri, fisheries, dairy, animal husbandry, food processing and allied activities.”